All posts tagged gold futures

Back before credit crunched, the metal was looked at as a rather risible relic and priced accordingly. In 2005, it was in the doldrums at $400 or so per ounce.

But things have changed. Those paper assets everyone was so fond of are toxic objects of suspicion now, in a world where even the bedrock of triple-A credit ratings has shifted. And gold is up at $1600.

You know something funny’s happening in the gold market when the page three girl in the Sun newspaper starts quoting the shiny metal’s futures price.

As Peta, 23, from Essex, did Wednesday morning. For those not in the know, by the way, the Sun’s page three is about naked flesh rather than naked options or even naked greed. It brings to mind Joseph Kennedy’s claim that he knew, in 1929, to get his money out of equities when the shoe-shine boy started giving stock tips.

(The Sun is, by the way, owned by News Corp. owner of Dow Jones News Wires and The Wall Street Journal.)

Still, nothing divides investor opinion as much as gold.

Is the surge in gold prices a rational response to fundamentals, particularly to inflation risk, as central banks pump up liquidity with quantitative easing? Or is it just another one of the market’s habitual manias, the next in a sequence that started with the tech bubble of the 1990s and progressed to the housing bubble of the past decade?